Kota Marudu Member of Parliament

Short-term extension for IPPs

KUALA LUMPUR: The Government has awarded a short-term extension to a few independent power producers (IPPs) through a competitive bidding process, said Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Ongkili. 

“There was an expansion shortage with some project delays, so we opened for bidding for those asking for an extension at an open pricing.

“The winners of the extension are YTL Power International Bhd and Malakoff Corp Bhd and the contract has been renewed for about three years,” Ongkili said after officiating the 33rd Asean Ministers on Energy Meeting and Associated Meetings.

Tenaga Nasional Bhd (TNB) on Monday had said the power purchase agreement (PPA), which was signed back on March 31, 1993 with YTL Power’s subsidiary – YTL Power Generation Sdn Bhd – had expired on Sept 30. Following the expiry of the PPA between the two companies, YTL Power no longer exports power to the grid effective Oct 1. The total capacity of the power station in Paka, Terengganu, is 780MW, consisting of two blocks of 390MW combined cycle gas-fired generating facility. The capacity of the power station in Pasir Gudang in Johor is 390MW.

Ongkili said the Government had approved the extension. “They just need to sort out the land issues with TNB.”

It is understood that the lease for the present site of YTL Power’s Pasir Gudang plant has expired and the land is said to belong to TNB.

“This (short-term extension) is part of our planting mechanism. We plan for our planting up. Some hydro projects are also slightly delayed. To make sure that we have the continuous 24%-25% reserve margin, we open for competitive bidding,” said Ongkili.

Energy Commission chief executive officer Datuk Ahmad Fauzi Hasan disclosed that YTL Power had been given an extension of two years and 10 months from March 2016 to December 2018, with a capacity of 585MW.

“The rate is very competitive. We don’t simply extend if the rates are not competitive,” Ahmad Fauzi said.

In addition, he disclosed that 1Malaysia Development Bhd’s (1MDB) Powertek Bhd had been given an extension of three years and 10 months from March 2016 to December 2019, with a capacity of 434MW.

Malakoff’s Port Dickson Power Sdn Bhd has been given an extension of three years from January 2016 to January 2019, with a capacity of 436MW.

YTL Power, Powertek and Port Dickson Power, all of which are first-generation IPPs, did not get their PPAs extended in the previous renegotiation exercise.

1MDB’s Powertek in Telok Gong, Malacca, and Malakoff’s Port Dickson Power will expire in early 2016.

First-generation IPPs that have been awarded an extension of 10 years to their PPAs are Kuala Langat Power Plant (previously known as Genting Sanyen Power) and Segari Energy (a subsidiary of Malakoff). TNB Pasir Gudang has been awarded a five-year extension to its PPA. TNB Pasir Gudang, which is currently operating under an agreement, will operate as an IPP after 2017.

A combined cycle gas turbine unit in SJ Jambatan Connaught Klang was also extended for four years and four months from September 2014 to December 2018.


Source - The Star